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Thread: Basic Due Diligence on site for sale on Flippa - MrStork.com

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    Basic Due Diligence on site for sale on Flippa - MrStork.com

    Hello,

    I am glad that flippa shutdown this auction:
    https://flippa.com/2714402-mobile-ad...bin-quick-sale

    as it fails some basic check. I cannot believe that people have bid upto $7k on this auction. The seller apparently has cancer.
    "She was just recently diagnosed with Invasive Lobular Carcinoma,
    Wow sounds really scary.

    Here are the basic steps that I took to verify the site.

    1. Always check the buyer background and history

    I looked at the buyers profile.

    https://flippa.com/users/494871

    Hmmm. Lots of other associated accounts. I went through all the accounts associated and the listings that they have had.

    2. Dig a bit deeper
    One of the user is webdorkette

    https://flippa.com/users/469628

    who is associated with another account webdesign12
    https://flippa.com/users/477643

    and you see the site that they have listed for sale
    https://flippa.com/2689288-start-up-...-14k-in-profit

    It is the same template, with similar pricing structure. Coincidence?

    3. Analyze writing pattern
    Look at the sellers general tone of voice here:
    https://flippa.com/2714402-mobile-ad...bin-quick-sale

    compare it to the tone of voice here:
    https://flippa.com/2689288-start-up-...-14k-in-profit

    I leave it to you to make the conclusion :-)

    Of course hindsight is 20/20 and it is easy to spot it after the account has been suspended.

    I am interested to know other flippa auctions that didn't pass the sniff test.

    Thanks

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    bwelford (25 March 2012), Clinton (25 March 2012), KenW3 (25 March 2012)

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    Hi powerrock, welcome to experienced-people.net.

    Great opening post!

    I've come to the conclusion that sites sold at the low end of the market have become very, very suspect. Five years ago if I were buying something as that end of the market there was a 10% chance I would have been scammed. Today, and despite the additional experience I've acquired, I believe that even someone like me has a greater than 90% chance of getting scammed in the sub-$1000 market and a good 50%+ chance in the sub $10K market!

    Flippa can provide details about connected accounts etc., but you can't escape one fact - scammy sellers will still manage to do a healthy trade in the low end. There would be a lot of auctions that didn't pass the sniff test. Some of them get quietly deleted. Some are still online and there's no indication that they were ever considered suspect. And there are many auctions where the marketplace still has no way of sniffing out the dodgy activity. I have 100% confidence that if I wanted to pull off a scam on there with a brand new Flippa account, I could do so with ease - piece of cake. If I can do it, others can. And they are.
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    @powerrock - great piece of investigative work there. It pretty well matches the basis for our suspension of the user.

    Something else worth checking are some of the whois records - I'm a big fan of domaintools for this.

    While mrstork.com presently has a private whois, a previous entry was http://www.domaintools.com/research/...ate=2012-03-10 (sorry, you'll need to be a subscriber to see these)

    Then check out the pre-private whois for webdorkette's fwbpages.com - http://www.domaintools.com/research/...ate=2011-11-28

    At a stretch, someone in an incredibly generous mood could argue that this is coincidence. However ...

    The testimonials section of MrStork.com includes an entry from the owner of Popsicakes and another from Right Blogging.

    The whois for popsicakes.com is http://whois.domaintools.com/popsicakes.com (we can view that one for free!) and the whois for rightblogging.com is http://whois.domaintools.com/rightblogging.com

    Our experience shows that sellers with fake testimonials on their sites are not quality sellers.

    I expect that this, coupled with duplicate accounts and unlikely description details, drove away the vast bulk of buyers - it was suspended towards the end of the auction and bidding had reached just 40% of monthly revenue.

    Quote Originally Posted by Clinton View Post
    I've come to the conclusion that sites sold at the low end of the market have become very, very suspect.
    This is not supported by data or logic. It costs a scammer much more to try selling 50 x $200 websites than it would for someone trying to do a more sophisticated scam on a one-off sale of a $10,000 website. We keep a keen eye on both but as I'm sure you appreciate - its incredibly important to do strong DD no matter what price point you are looking at buying.

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    Quote Originally Posted by Andrew View Post
    It costs a scammer much more to try selling 50 x $200 websites than it would for someone trying to do a more sophisticated scam on a one-off sale of a $10,000 website. We keep a keen eye on both but as I'm sure you appreciate - its incredibly important to do strong DD no matter what price point you are looking at buying.
    I agree that there needs to be due diligence (or at least watchfulness and a degree of skepticism) at all levels, but I have bid on several sites at the low end of the market with very little due diligence because the value of my time spent on due diligence is worth more to me than the $75 or $100 I might lose. If there are red flags, I just take a pass rather than try to figure it out.

    As far as fewer scams at the low end, I think to some extent that is probably true. The lies are probably smaller. For example, the site that claims unique content when the content is barely rewritten PLR articles. Or the site that doesn't claim either unique content or unique design but says that the content is "keyword rich" - which has little or no value if other more authoritative sites are using the same material which had already been indexed. Those aren't so much scams and they are snake oil. On the other hand, anyone who thinks he is really getting much of anything at the low end is probably willing to suspend disbelief in order to chase the golden egg.

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    Exactly ...

    Hello Clinton:

    Quote Originally Posted by Clinton
    I have 100% confidence that if I wanted to pull off a scam on there with a brand new Flippa account, I could do so with ease - piece of cake. If I can do it, others can. And they are.
    totally agree with you. For this particular listing, it wasn't a skilled scammer. My main point of concern is that people have bid up to $7k on this auction without doing the basic sniff test. I wonder how they will do when you start scamming them :-) jk.

    I am not pointing fingers either. I have been there too. I have lost $2.5k on a website that sounded too good to be true and it was. Anyway lesson learned.

    That is why I am grateful that there are forums like this where we discuss and learn from each others mistakes.

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    KenW3 (26 March 2012)

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    Quote Originally Posted by powerrock View Post
    My main point of concern is that people have bid up to $7k on this auction without doing the basic sniff test
    The problem is that there are several factors at play lulling buyers into a false sense of security. It's not helped by the chatter online, the numerous ebooks, courses, seminars and other products, that sneakily underplay the risks. These products often start off by winning trust and declaring at the outset that due diligence needs to be done prior to any purchase - a perfectly reasonable sounding caution - and go on to claim that they can teach all the skills needed to conduct this due diligence.

    Except, of course, that they can't.

    Students of these courses proceed to go ahead with purchases based on the false confidence that's been instilled in them.

    Sometimes the authors of this information, while purporting to help people understand the market, are engaged in selling low value sites themselves and have a vested interest in making their readers less cautious or in directing their attention to the wrong due diligence checks. Hence you have buyers at the low end of the market obsessing about checking SERPs and PR rather than net profit and cash flow (or the tricks used to inflate these).
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